The Duckhorn Portfolio Inc (NAPA, Financial) released its 8-K filing on June 6, 2024, detailing its financial results for the third quarter of fiscal year 2024. The company, known for producing luxury and ultra-luxury wines under brands such as Duckhorn Vineyards, Paraduxx, and Goldeneye, reported net sales of $92.5 million, a 1.4% increase from the same period last year. However, net income decreased by 20.7% year over year to $13.3 million.
Performance Overview
Despite a challenging market environment, The Duckhorn Portfolio Inc (NAPA, Financial) managed to achieve a slight increase in net sales, reaching $92.5 million, up from $91.2 million in the prior year period. This growth was primarily driven by a shift in the timing of the DTC Kosta Browne appellation series offering. However, the company faced a decline in shipment volume, which partially offset the positive impact of higher price/mix.
Gross profit for the quarter was $51.4 million, an increase of $0.9 million or 1.8% compared to the previous year. The gross profit margin improved by 20 basis points to 55.6%, reflecting cost of sales improvements. However, net income fell to $13.3 million, or $0.12 per diluted share, from $16.8 million, or $0.15 per diluted share, in the prior year period. Adjusted net income was $16.3 million, or $0.14 per diluted share, compared to $19.0 million, or $0.16 per diluted share, in the previous year.
Financial Achievements and Challenges
The Duckhorn Portfolio Inc (NAPA, Financial) reported an adjusted EBITDA of $37.7 million, marking a 5.3% increase from the prior year. The adjusted EBITDA margin also improved by 150 basis points to 40.8%. This performance underscores the company's commitment to operational excellence, even amid a softer wine market.
"Our teams continued to execute against a challenging industry backdrop," said Deirdre Mahlan, President, CEO, and Chairperson. "While top line results were impacted by the softer wine market, our ongoing commitment to operational excellence enabled us to maintain strong performance in the third quarter, with an adjusted EBITDA margin of 40.8%."
Income Statement Highlights
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $92.5 million | $91.2 million |
| Gross Profit | $51.4 million | $50.5 million |
| Net Income | $13.3 million | $16.8 million |
| Adjusted EBITDA | $37.7 million | $35.8 million |
Balance Sheet and Cash Flow
As of April 30, 2024, The Duckhorn Portfolio Inc (NAPA, Financial) reported cash holdings of $15.7 million. The company's leverage ratio stood at 2.1x net debt to trailing twelve months adjusted EBITDA. Total assets were $1.79 billion, up from $1.35 billion as of July 31, 2023, reflecting significant investments in property and equipment, as well as the acquisition of Sonoma-Cutrer Vineyards.
Updated Fiscal Year 2024 Guidance
The company updated its guidance for fiscal year 2024, projecting net sales in the range of $398 million to $408 million, including approximately $16 million from Sonoma-Cutrer Vineyards. Adjusted EBITDA is expected to be between $146 million and $150 million, with adjusted EPS ranging from $0.56 to $0.58.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from The Duckhorn Portfolio Inc for further details.
